The Government has published detailed guidance on the upcoming changes to the Coronavirus Job Retention scheme. Some important changes are coming into force over the next couple of months, so if you are an employer making use of this scheme, it’s important you understand the upcoming changes and your obligations. 

The level of government support is changing from the 1 July 2020 but there are other important factors you need to be aware of before this date:

• No new employees can be furloughed after 10 June - The current scheme runs until 30 June 2020.  Employees will need to be furloughed by 10 June so that they have completed a three week period prior to the end of the current scheme. Employers will have until 31st July to make any claims in respect of the period to 30 June.
• The new scheme, which allows part-time working, runs from 1 July - from this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June.
• From 1 July furloughed workers can work part-time – following on from the point above, employers will be able to ask eligible furloughed workers to work part-time on any pattern and make pro-rata furlough claims for the proportion of the week they are not working.

Action to take now

As new employees can’t be furloughed after 10 June (and any new employees need to be fully furloughed for three weeks prior to 30 June), it’s a good idea to start thinking about any staff rotation you may want to put in place before the 10 June deadline. In some instances this may be difficult due to the requirement to have particular skill sets in place, or where furloughed staff cannot return to work due to childcare issues. However, all employers should be carefully considering their workforce requirements now, to give themselves maximum flexibility from 1 July.

Bringing in flexibility before the level of government support drops, could be a big positive for your business.

Employers contributing to furlough staff wages

From August, employers will be asked to contribute to furloughed employees’ wages. The detail of how this will work and what employers will be obliged to pay has not yet been published, so we’ve based the following on our understanding of how it could work:

Cap* (currently 80%, £2,500) minus pro-rated pay = claim.

• In June and July, the government will pay 80% of wages up to a cap of £2,500* as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee doesn’t work. Employers will have to pay employees for the hours they work.
• In August, the Government will pay 80% of wages up to a cap of £2,500* and employers will pay ER NICs and pension contributions for the hours the employee does not work.
• In September, the Government will pay 70% of wages up to a cap of £2,187.50* for the hours the employee does not work. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
• In October, the Government will pay 60% of wages up to a cap of £1,875* for the hours the employee does not work. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.

*The cap will be proportional to the hours not worked.

Further guidance on flexible furloughing of bringing people back part-time, and how employers should calculate claims will be published on 12 June. We’ll provide an updated blog as soon as this guidance is published.

Get in touch

If you have any queries or concerns about the JRS please get in touch with your usual Johnston Carmichael adviser or alternatively you can contact our dedicated JRS team at: JRS@jcca.co.uk.